Government officials have finally agreed on how to create "single business numbers", which would help businesses quickly identify themselves to government agencies and to one another.

Backers hope the system will slash red tape and unleash a new wave of e-commerce but ministers and Privacy Commissioner Marie Shroff have yet to approve the plan.

After three years of deliberations, a Ministry of Business, Innovation and Employment (MBIE) spokesman said agencies had published a document titled "The Case for Change" that "agreed, in principle, the strategic direction to implement the New Zealand business number".

"This document has been agreed by the government agencies involved but has not yet been circulated with ministers."

He could not disclose the key recommendations.

A key unknown is whether the numbers would be issued to sole traders as well as to limited liability companies and partnerships.

In 2011, officials mooted allocating businesses a free 13-digit number based on the barcode numbering system administered by standards body GS1, saying that should be accompanied by a searchable online business register. They cautioned new legislation might be required.

If extended to sole traders, the numbers would identify individuals and could potentially be used to link their dealings with different government agencies.

Shroff said, as far as she was aware, her office had not seen officials' recommendations.

Single business numbers could "save unnecessary duplication and costs for businesses" and make it easier for them to deal with government, she said.

However, privacy was an issue that needed to be considered with respect to sole traders.

"There's a range of ways to get it right and we've been discussing these with MBIE," she said.

Xero chief executive Rod Drury, who has been championing single business numbers since 2010, said the choice of GS1 codes would be a good one.

It was important sole traders were included on the register because they made up a big proportion of businesses, he said.

The register could streamline the process of setting up businesses by triggering the allocation of GST numbers and ACC accounts, for example.

It could also make it easier for firms to eradicate paper invoicing and carry out credit checks, he said.

Companies would be able to input a single business number online and know who were they dealing with, Drury said.

"If there is a single business number, it is much easier to invoice electronically.

"Think how many millions of hours a year are wasted on re- keying data that already exists electronically."